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Declaring bankruptcy is one of the most serious financial decisions a person can make. But sometimes, it’s the only way to truly achieve a fresh start.
Bankruptcy is a legal proceeding that allows you to obtain a discharge from your obligation to pay certain debts. For some service members and veterans who are facing extreme debt, declaring bankruptcy can be the best option for getting your head above water.
Bankruptcy is not a free ride. Depending on your situation and the laws of your state, you may have to liquidate some of your property or assets. A bankruptcy filing will become part of your credit report for the next 10 years, making it more difficult and expensive to get new credit. This can affect your ability to rent an apartment, buy or rent a car, or even buy insurance.
Understand Your Options
Before you make a decision, NFCC-certified credit and debt counselors can walk you through the advantages and disadvantages of declaring bankruptcy as well as any available alternatives. Generally, you should pursue other options, such as debt consolidation or a debt management plan, before deciding on bankruptcy as a last resort.
NFCC-certified counselors can help make sure that you’re aware of these options and talk through considerations that are important to you, including whether filing for bankruptcy will affect your security clearance.
Declaring bankruptcy is a momentous decision, and we want to make sure you have all the facts. Visit our bankruptcy FAQs and our bankruptcy counseling page to learn more and get answers to frequently asked questions, including:
There are two main types of personal bankruptcy:
Understand the Consequences
Written by an NFCC vice president, this blog entry lays out some of the potential consequences of filing for bankruptcy, which can affect your credit card interest rates, your ability to secure a mortgage, and even your consideration for future jobs.
NFCC experts have written other helpful blog entries on bankruptcy as well.